Strong demand fuels growth, drives appeal of lot-only offerings in MM
My recent articles focused on the viability of house-and-lot and lot-only projects outside Metro Manila.
This is pretty understandable given that these horizontal developments have been recording steady price acceleration even at the height of the pandemic. They’re also popular among overseas Filipino workers (OFWs), who are helping drive end-user demand for residential projects.
Attractiveness of lot-only dev’ts
The attractiveness of the lot-only segment is an interesting angle to highlight.
At Colliers Philippines, we already discussed the major reasons why astute and affluent investors are actively looking at lot-only options. These include the evident price correction in some condominium projects in certain locations; improvements in infrastructure connectivity between Metro Manila and key areas in Central and Southern Luzon; and decline in rental yields in the Metro Manila condominium market, prompting investors to look for alternative investment options.
In our view, lot-only projects are attractive given their large lot cuts; greener and more open spaces; and the potential for price appreciation. A quick market scan reveal that lot-only developments in some localities recorded formidable price increases yearly from 2016 to 2024.
Cornering strong lot-only demand in MM
Colliers data showed that while developers are launching less projects in Metro Manila, the share of upscale to luxury-priced segments has been increasing. In 2024, the more expensive segments covered about 40 percent of total launches, bigger than their 20 percent share a year ago.
In our view, the tempered launch of new projects in Metro Manila and introduction of more expensive projects here are part of property players’ recalibration strategy. Hence, the launch of more expensive horizontal projects, particularly residential lot-only developments, makes sense.
Given the limited supply and rising demand, we expect the prices of these lot-only units in Metro Manila to increase in the years to come.
Interestingly, developers primarily focused on mid-income projects are now targeting higher-priced residential segment with an emphasis on horizontal communities.
Strong appetite
The appetite for these projects remains strong.
Our most recent Colliers poll showed that more than 90 percent of our respondents believe that having green and sustainable features is important in purchasing a residential unit. Close to 100 percent of respondents said they prefer greener and more open spaces when buying a residential unit.
Respondents likewise noted that they prefer sustainable features for their next horizontal investment; easy access to essential goods and services; and integrated communities that exhibit the 15-minute city concept.
Seizing opportunities
The strong preference for lot-only projects in Southern Luzon is starting to spill over and this preference is seen even within Metro Manila.
It is no longer surprising to see developers seizing opportunities to ride on this growing subsegment by also launching lot-only projects in southern Metro Manila area, including parts of Las Piñas and Muntinlupa, particularly Susana Heights where Signature Series by SM Residences is planning to launch residential lot-only units.
Aside from bustling commercial activities in the corridor, these cities also benefit, directly or tangentially, from public projects lined up for completion, including the North-South Commuter Railway, LRT-1 Cavite Extension, NLEx-SLEx Connector Road, Cavite-Laguna Expressway (Calax), Bataan-Cavite Interlink Bridge, Cavite Bus Rapid Transit, Ninoy Aquino International Airport (NAIA) Rehabilitation and the Laguna Lake Road Network (LLRN).
Sustained price appreciation
In Batangas, residential lot-only projects posted an 8 percent annual price growth from 2016 to 2024 while those in Laguna recorded an annual price acceleration of 6 percent yearly. Lot-only developments in Cavite, meanwhile, recorded 7 percent annual price growth in the same period.
It is this sustained price appreciation that has been enticing investors to acquire lot-only projects. But given the lack of ideal land for lot-only projects in Metro Manila, buyers are looking at projects outside of the capital region.
In Cavite, for example, the most expensive lot-only projects have average sizes of between 126 sqm and 832 sqm, with average price per lot ranging from P30,000 to P66,000 per sqm. Premium lot-only units in Laguna are priced between P31,000 and P58,000 per sqm, with sizes ranging from 143 sqm to 1,100 sqm.
Premium prices
Obviously, these lot-only projects aren’t cheap.
Several factors contribute to this. There’s limited supply and strong demand. Plus, these projects are being developed within massive masterplanned communities, ensuring everything is within reach. This enables developers to command premium prices.
Residential lot-only is definitely a hot property sub-segment these days. The prospect of launching limited lots in Metro Manila, where demand appears to be brisk, will only excite prospective buyers.
These attractive lot-only projects are set to redefine the Metro Manila residential landscape.
